Target talent needs and business practices to improve supply chain shortfalls.
When we think of supply chain issues, we often think of empty grocery store shelves or ports filled with ships waiting to be unloaded. But we cannot discount the connection between current supply chain difficulties and labor shortages.
Consider the product orders or services that go unfulfilled when staff are absent or positions remain vacant. Additionally, the pandemic has changed consumer preferences, with demand for services decreasing and increasing for goods. That has shifted the types of talent that are needed.
In the US, the new infrastructure law will increase demand for labor while it aims to reduce the likelihood of supply chain crises longer term with investments to update waterway transportation and railways.
The supply chain and labor challenges are likewise in part a result of rapid technological advancements, which create skills shortages. Even if there are no new COVID-19 variants, the world will not see a return to pre-pandemic supply or labor demands immediately.
How are businesses coping, and what are potential strategies moving forward?
New business partners and practices
Part of the solution to supply chain shortfalls is for companies to alter the way they obtain product supplies, the products or services they produce, and production methods. Use data and analytics to figure out the supply chain vulnerabilities, advises Mitesh Motwani in a SupplyChainBrain article.
He recommends simplifying and considering obtaining goods from larger suppliers, which are likely to be less susceptible to volatile shifts caused by weather, staffing shortages, and other factors. All of that depends on new and increased partnerships, both internally and externally.
Alan McKinnon and co-authors write for the World Economic Forum that companies could have assuaged some of the challenges around supply and demand: "Internal and external communications could have been improved."
They continue, "The pandemic exacerbated the silo structure that still prevails in many businesses, inhibiting the flow of information and obstructing a coordinated response to supply chain disruptions. Experience has now shown that managing supply chains during a pandemic requires a cross-functional effort."
Efficiencies and an effective use of automation can help businesses weather the challenges and move forward. One chief financial officer of a midsize US tech firm weighed in on company strategy during recent StratgicCFO360 polling: "Drive org changes, job level responsibility changes and automation/software/business process improvement efforts to improve efficiency at key employee functions." That can assist employees in dealing with the extra work from unfilled roles and turnover.
Simplification in work design is important in an age of constant change and labor shortages. "Supply chain executives should look to eliminate all nonessential partners, rules, and policies that staff have to consider before completing a workflow," notes Caroline Chumakov in a CSCMP's Supply Chain Quarterly article.
Further, while automation can create challenges, it can provide solutions, Robert J. Bowman writes in a SupplyChainBrain article. Automation will alleviate some of the human staffing holes and replace some of the repetitive work, freeing humans to do more high-level tasks.
In short, as UPS CEO Carol Tomé points out in a Fortune's Leadership Next podcast, "What we've learned is that people move the supply chain. From warehouse workers to dock workers to loads to drivers to pilots. We need to automate everywhere we can, so we don't have such reliance on people."
Preparing for tomorrow
McKinnon and co-authors write that companies can better train managers to ideate and build scenarios for supply chain disruptions. Managers need to be able to think creatively and innovatively on how to manage risk in the supply chain crisis and "to factor risk management and resilience into all aspects and levels of their decision-making."
Different organizations will need different solutions. Second-chance employees, juveniles, and retiring veterans are one possibility.
Upskilling is also a must. Chumakov recommends upskilling employees in five competencies—business acumen, adaptability, political savviness, fusion collaboration, and systems thinking—relative to digital dexterity, which she defines as a "set of beliefs, mindsets, and behaviors that help employees deliver faster and more valuable outcomes from digital initiatives."
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